To The Moon

Nvidia is in the spotlight today. It has demonstrated the strong resilience of an AI computing power leader through better-than-expected financial performance, and its stock price rose more than 6% after hours due to impressive earnings results. However, market divisions over the company have never ceased: bears are concerned about valuation bubbles, as its price-to-earnings ratio and price-to-sales ratio are far higher than those of peers. They also worry about intensified competition——competitors like AMD and Intel are ramping up efforts, while tech giants such as Google and Microsoft are also laying out self-developed chips.[Surprised]

However, the bull camp remains strong. Top institutions’ holdings have not seen significant reductions, and the market generally recognizes its long-term value. In terms of performance, the company’s third fiscal quarter revenue reached $57.01 billion. Net profit soared 65% year-on-year, and data center business revenue hit $51.2 billion. The company also forecasts fourth-quarter revenue to reach $65 billionAll the data far exceeded market expectations. All the data far exceeded market expectations.[Miser]

The core supporting its long-term competitiveness lies in the CUDA ecosystem that binds millions of developers worldwide, while on the hardware side, it has locked in key production capacity through in-depth cooperation with TSMC. Nevertheless, market expectations for the company are already extremely high, and factors like TSMC's CoWoS capacity bottleneck may still bring phased negative news.

In such a market rhythm, no matter how volatile the market is, investors can optimize asset allocation through diversified tools. Option Screener is a highly efficient and reliable tool that allows investors to set a variety of filters and criteria, such as option type, expiration date, strike price, implied volatility, trading volume, and more. With the Option Screener, you can accurately capture options opportunities for targets like NVIDIA and calmly navigate the bull-bear game. Let’s see how it helps investors seize opportunities amid volatility~[Happy]

The Logic of Cash-Secured Put

Cash-Secured Put is especially suitable for investors who are bullish on an underlying asset in the long term but want to “buy low” or “earn premiums” amid market volatility. The logic of this strategy is straightforward:

• Action 1: Sell a put option to earn the option premium.

• Action 2: Hold enough cash as collateral to potentially buy the underlying stock at the strike price.

In short, by selling a put, you express the view that the underlying won’t plummet in the short term, while holding cash to prepare for buying the stock at the strike price if it falls below that level.

Potential Profits

• If the underlying stock price is above the strike price at expiration, the option buyer won’t exercise the option. You keep the entire premium!

• If the underlying stock price is below the strike price at expiration, the option buyer will exercise, and you’ll buy the stock at the strike price. This can also be profitable in the long run.

But in extreme cases, if the stock price drops to near zero, you’ll have to buy nearly worthless shares at the strike price with your reserved cash. The loss here is “strike price-premium”, which is limited but can be significant.

Three Needs, One Strategy

Cash-Secured Put fits three types of investors:

1.Earn Premiums Steadily

If you’re bullish on the underlying long-term but don’t expect a short-term drop, sell a short-term, deep out-of-the-money (OTM) put option:

• “Short-term” because near-month options have faster time decay, helping you earn premiums quickly.

• “Deep OTM” because these options have a low probability of being exercised, allowing you to keep the premium securely.

2.Buy Low

If you think the current stock price is too high and want to buy on a pullback, sell a put option with a strike price below the current stock price:

• If the stock drops to the strike price, you buy at your target price and earn extra premium;

• If the stock doesn’t drop to the strike price, you still earn the premium.

3.Reduce Holding Costs

If you plan to build a position in the future but don’t need to buy immediately, repeatedly sell put options:

• If the option is exercised, you buy the stock at your target price while earning multiple rounds of premiums, reducing your holding cost;

• If the option isn’t exercised, you keep earning premiums, essentially saving for future positions.

Cash-Secured Put is the "Goldilocks strategy" in NVDA's volatile market. With controllable risk and flexible returns, it can earn short-term premiums while paving the way for long-term positioning. You might consider trying this strategy in NVDA options trading according to your risk preference~

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